Old Currency - Part II

Here is the link to Part I, if you missed it.

Money, money, money.

People dream about it, write songs about it, and fight over it. Throughout American history, our country struggled for lack of it--or for having too much. From Continentals issued to finance the American Revolution, to Confederate currency backed by cotton, and today's Federal Reserve notes backed by faith in the U.S. government, the story of American history is told in its currency.

As you travel through history, you'll discover that changes in American currency often came about during times of crisis, such as the American Revolution and the Civil War. Many changes in American currency resulted from necessity as the rapidly expanding country struggled to create a reliable money and banking system. Some changes in American currency reflected our country's political struggles. The historical debate over a national banking system for the country, which was first proposed by Alexander Hamilton after the American Revolution, resurfaced with the reform movement that established the Federal Reserve System in 1913.

Inspiring faith in paper notes is an enduring theme in the history of American currency. Today we take for granted that our money will always be accepted, but it hasn't always been this way. As you journey through the exhibit, imagine what it might have been like to carry Spanish milled dollars, "broken" bank notes, or Fractional currency in your wallet. Can you identify the significance of American currency's patriotic symbols and historical images? Since the founding of our nation, the evolution of American currency has been as rich and exciting as our country's heritage. Let the journey begin...

Let's start with fractional notes. What are they?

Fractional currency notes were issued by the United States Federal Government during and after the U.S. Civil War due to the hoarding and shortage of coins in gold, silver and copper in denominations of 3, 5, 10, 15, 25 and 50 cents. These notes were in use until 1876 and were redeemable by the U.S. Postal Office at face value in postage stamps.

A controversy arose concerning the third issue of the 5-Cent Notes, when Spencer M. Clark, the first superintendent of the National Currency Bureau (now the U.S. Bureau of Engraving and Printing) had his portrait printed on the fractional note, a practice subsequently barred by law. (the currency can portray notable U.S. citizens only after at least two years have followed the subject's death).

Fractional currency notes were issued from August 21, 1862, through February 15, 1876. U.S. Secretary of the Treasury Salmon P. Chase proposed to authorize postage stamps of some type as a new currency. Much of the public were using stamps in lieu of change due to a severe shortage of coins. The post office did not like selling stamps for currency and they did not provide refunds for soiled stamps.

Congress and President Lincoln approved the Postage Currency Act on July 17, 1862, which authorized an issue of 5, 10, 25, and 50 cent notes. The 1st Issues became known as Postage Stamp Currency because they bore facsimiles of the then current 5 and 10 cent postage stamps. Postage Currency (1st Issue) were never legal tender but could be exchanged for United States Notes in $5 lots and receivable in payment of all dues to the United States, up to $5.

In the first few months of production, the sheets were perforated like stamps. These sheets were sold to banks and the public in sheets and you could tear off the notes needed with ease. The perforating machine could not keep up with the heavy demand so the banknote company started producing plain sheets that were cut with scissors.

In 1863, Secretary Chase asked for a new Fractional Currency that was harder to counterfeit than the Postage Currency. The new Fractional Currency notes were different from the 1862 Postage Currency issues. They were more colorful with printing on the reverse.

Fractional currency was succeeded by postal notes that were issued from Monday, September 3, 1883 to Saturday, June 30, 1894.

I scanned part of my collection to show you. *Click the page to magnify.


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Here are the back sides of the currency shown above. *click page to magnify